What is a Residents' Association

A Tenants’ or Residents’ Association is a group of leaseholders who have been granted leases from the same Landlord on similar terms and which leases include provisions for the payment of variable service charges.  To be effective, a Residents’ Association should be formally recognised.

Who Can Become a Member of a Residents’ Association?

In general terms to become a member of a Residents’ Association you must be contributing to a service charge, which is an amount in addition to the rent and is payable directly or indirectly for services, repairs, maintenance, improvement or insurance and the whole of part of which varies according to the relevant cost.  This should be contrasted with leaseholders who pay a fixed or non-variable service charge: in such a situation, whilst the leaseholder would be entitled to membership of the association, he/she would not be entitled to vote.  The position is the same with sub-tenants.

Landlords are not permitted to become member nor are Management Companies.

Why form a Residents’ Association?

Residents’ Associations are usually formed with a view to represent the members to an “independent” Landlord. In addition, a recognised Residents’ Association may also request certain types of information from a Landlord such as summary of costs etc.

Further, a Landlord is also required to consult a recognised Residents’ Associations on matters such as service charges and management. In particular, a recognised Residents’ Association can require the Landlord to consult with them concerning when appointment managing agents.

The Role and Advantages of a Residents’ Association:

A Residents’ Association offers leaseholders a change to maximum the benefits of rights conferred to them under their leases.  In addition, in the event conflicts arise between residents and Landlord or their agents, by forming an Association, the residents are in a more much strengthened position in that they can rely on the support of others leaseholders with similar interests in the Association.  In other words, the strength of a well-supported Residents’ Association lies in its capacity for collective action.

Typically things Residents Associations get involved in:

  • Increase the sense of belonging to a community;
  • Inform residents of their rights under the law and in particular under the Landlord and Tenant related legislation;
  • Exert pressure on the landlord or his agent to maintain an appropriate standards of decoration and maintenance to the interior and exterior of buildings, and at reasonable costs
  • Establish a relationship with landlord and/or his agent to facilitate good management; represent the needs and views of residents on management issues and report back to the residents the concerns of the landlord/agent
  • Assist in resolving disputes between individual residents
  • Organise opposition to undesirable planning applications
  • Prepare to take on responsibilities of management if transferred by the landlord under the Rights of First Refusal or Right to Manage Legislation or following the purchase by the residents of the landlord’s interest collectively.

Recognition?

As discussed in our last article in this series, to be effective, a residents’ association should be formally recognised particularly as legislation confers on recognised associations additional powers and rights.

What are the advantages of recognition?

Recognised Residents’ Association are entitled to:-

  • Obtain      information about service charge accounts;
  • Be      consulted about the landlord’s choice of appointing managing agents;
  • Be      notified by the landlord of proposed major works and receive copies of      estimates etc.
  • Submit      details of contractors which the landlord must consider before embarking      on major work projects;
  • Appoint      a surveyor under the Housing Act 1996 for the purposes of a management      audit

So how does an Associated become recognised?

There are two ways in which a residents’ association can obtain recognition:-

  1. A      written notice to this effect is given by the landlord to the secretary of      the residents’ association; or
  2. A      certificate to this effect is issued by the local Rent Assessment      Committee.

A landlord’s certificate is usually valid indefinitely unless the residents’ association is given six month notice of the landlord’s intention to withdraw it.

The local Rent Assessment Panels are usually willing to issue recognition certificates to any properly constituted association.  The certificate from the local Rent Assessment Committee usually last for four years, after which, the residents’ association is free to apply for its renewal.

Application procedure for obtaining recognition made to Rent Assessment Committee?

If the landlord refuses or ignores the associations request for recognition, an application should be made to the local Rent Assessment Panel.  The application should be made on a form which can be obtained from one of the Panel’s office.  A copy of the associations list of members and flats and a copy of the associations Constitutions and Rules will also need to be submitted to the Panel.  The Panel make no charge for the application but each party should be able to meet their own costs.

Conditions for Obtaining Statutory Recognition?

The granting of recognition is at the discretion of the reviewing Panel.  Guidelines were issued by the Department of the Environment in 1980 and to qualify for a recognition certificate an association must meet certain conditions and criterion laid down by the Office of the Deputy Prime Minister and the Welsh Assembly Government.  In particular the associations Constitution and Rules must be “fair and democratic” and should cover, amongst other matters, the following:-

  • Openness of Membership - an elected committee which is made up of a secretary, chairman and other officers;
  • Payment and the amount of subscription and obligatory Annual Meetings;
  • Independencefrom the      Landlord – membership open to all tenants, including sub-tenants but      denied to the landlord and his employees;
  • Notice of Meetings – voting arrangement and quorum.

As a general rule, the Panel would expect the Membership to be not less than 60% of those qualifying to join the association.  In special cases a lower percentage may be acceptable for example, where there is a block of flats with an association which is recognised by the landlord but considered unsatisfactory by the tenants wishing to form a new one.

Conclusion:

The strength of a well-supported Residents’ Association lies in its capacity for collective action and formal recognition.  Is your residents’ association recognised? If not…then what are you waiting for?

Yashmin Mistry, Partner, JPC Law ymistry@jpclaw.co.uk   www.jpclaw.co.uk; Telephone: 0207 644 7294

 


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